Bri-Chem Announces 2025 Second Quarter Financial Results

Rhea-AI Summary

Bri-Chem Corp. (TSX: BRY), a North American oilfield chemical distribution company, reported its Q2 2025 financial results with consolidated sales of $20.5 million, up 7% year-over-year. The company achieved Adjusted EBITDA of $1.0 million, a 48% increase from Q2 2024, and improved its operating earnings by 24% to $772,000.

Key performance metrics include adjusted net earnings of $0.01 per diluted share, compared to a loss of $0.02 in Q2 2024. Working capital stood at $11.1 million, down 21% year-over-year. The US drilling fluids division saw a 7% sales increase to $12.3 million, while Canadian operations reached $1.7 million in sales.

The company expects flat to slightly declining rig activity across North America through 2025, with potential recovery in early 2026.

Positive

• Consolidated sales increased by 7% to $20.5 million in Q2 2025
• Adjusted EBITDA grew 48% to $1.0 million compared to Q2 2024
• Operating earnings improved 24% to $772,000 year-over-year
• US drilling fluids distribution sales increased 7% to $12.3 million
• Turned adjusted net loss of $0.02 per share in Q2 2024 to earnings of $0.01 in Q2 2025

Negative

• Working capital decreased 21% to $11.1 million from Q2 2024
• Gross margin decreased by $152,000 due to unfavorable product mix in fluid blending division
• Canadian blending and packaging division sales declined by $358,000
• Total assets decreased 10% to $53.4 million
• Challenging outlook with flat to declining rig activity expected through 2025

Edmonton, Alberta--(Newsfile Corp. - August 14, 2025) - Bri-Chem Corp. (TSX: BRY) ("Bri-Chem" or "Company"), a leading North American oilfield chemical distribution and blending company, is pleased to announce its 2025 second quarter financial results.

		Three months ended												Six months ended
					June 30			Change									June 30			Change
(in '000s except per share amounts)		2025			2024			$			%			2025			2024			$			%
Financial performance
Sales	$	20,534		$	19,105		$	1,430			7%		$	40,443		$	40,477		$	(34	)		(0%)
Adjusted EBITDA(1)		1,045			706			338			48%			1,511			264			1,248			474%
As a % of revenue		5%			4%									4%			1%
Operating earnings		772			620			152			24%			748			476			273			57%
Adjusted net earnings / (loss) (1)		60			(584	)		644			(110%)			(558	)		(2,351	)		1,792			(76%)
Net earnings / (loss)	$	157		$	(488	)	$	645			(132%)		$	(255	)	$	(1,994	)	$	1,739			(87%)
Per diluted share
Adjusted EBITDA (1)	$	0.04		$	0.03		$	0.01			38%		$	0.06		$	0.01		$	0.05			504%
Adjusted net earnings / (loss) (1)	$	0.01		$	(0.02	)	$	0.03			(137%)		$	(0.02	)	$	(0.09	)	$	0.07			(79%)
Net earnings / (loss)	$	0.02		$	(0.02	)	$	0.04			(218%)		$	(0.01	)	$	(0.08	)	$	0.07			(93%)
Financial position
Total assets													$	53,404		$	59,191		$	(5,787	)		(10%)
Working capital														11,136			14,143			(3,006	)		(21%)
Long-term debt														6,399			6,616			(217	)		(3%)
Shareholders equity													$	19,405		$	21,596		$	(2,190	)		(10%)

⁽¹⁾ Non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this press release.

Key Q2 2025 highlights include:

• Consolidated sales for the three months ended June 30, 2025 were $20.5 million, representing a 7% increase from the prior year. The increase is primarily due to increased sales in the fluid distribution division in the USA Rockies region.

• Consolidated gross margin for the three months ended June 30, 2025 decreased by $152 thousand compared to the same period last year. The gross margin dollar decrease is primarily related to the unfavorable change in product mix in the fluid blending and packaging division.

• Adjusted EBITDA for the second quarter 2025 was $1.0 million compared to $706 thousand for Q2 2024 representing an increase of $340 thousand when compared to the same period in the prior year and operating earnings increased by $152 thousand for the three months ended June 30, 2025 compared to the prior year due to a decrease in bad debt expense.

• Adjusted net earnings per diluted share for the three months ended June 30, 2025 was $0.01 per share compared to adjusted net loss of $0.02 per diluted share for same period last year.

• Working capital, as at June 30, 2025, was $11.1 million compared to $14.1 million on June 30, 2024, a decrease of 21%. The decrease in working capital relates to a significant decrease in accounts receivables and inventory which was offset by decreased bank indebtedness.

Summary for the three months ended June 30, 2025:

Consolidated sales for the three months ended June 30, 2025 were $20.5 million compared to $19.1 million for the same period in 2024, representing a $1.4 million increase over the comparable period. Revenue was impacted by higher fluid distribution sales, driven by higher sales of select commodity items within the USA Rockies region.

Bri-Chem's Canadian drilling fluids distribution division generated sales of $1.7 million for the three months ended June 30, 2025, which was higher to the comparable prior period by $611 thousand. The number of Canadian active operating land rigs in Q2 2025 averaged 127, compared to 133 in the same period last year representing a decrease of approximately 5% (Source: Baker Hughes). Bri-Chem's United States drilling fluids distribution division generated sales of $12.3 million for the three months ended June 30, 2025, compared to sales of $11.4 million for the comparable period in 2024, representing a quarterly increase of 7%. The active number of US operating land rigs in Q2 2025 averaged 556, compared to a 2024 Q2 average of 582 representing a decrease of approximately 4% (Source: Baker Hughes).

Bri-Chem's Canadian blending and packaging division generated sales of $3.9 million for the three months ended June 30, 2025, compared to Q2 2024 sales of $4.3 million, representing a quarterly decrease of $358 thousand. The slight decrease in sales relates to lower cementing and stimulation activities in Western Canada. US blending and packaging sales for the three months ended June 30, 2025 were $2.5 million compared to $2.2 million in the prior year. The $332 thousand increase is due to an increase in cementing activities in the California region.

Operating earnings for the three months ended June 30, 2025 was $772 thousand which is an increase from earnings of $620 thousand in the same period in the prior year. Adjusted EBITDA was $1.0 million for Q2 2025 compared to $706 thousand for Q2 2024. The increase is primarily driven by the foreign exchange gain. Adjusted EBITDA as a percentage of sales was 5% for the quarter, which is an increase from 4% in Q2 2024.

OUTLOOK

As Bri-Chem enters the second half of 2025, the Company continues to navigate a challenging operating environment shaped by ongoing commodity price volatility, cautious capital spending by customers, and evolving political and regulatory developments in both Canada and the United States. These external pressures have contributed to a measured pace of drilling and completion activity across North America.

According to the latest forecast from Baker Hughes, rig activity in both Canada and the United States is expected to remain relatively flat or slightly decline through the remainder of the year, with the potential for a gradual recovery beginning in early 2026. In Canada, activity is projected to follow historical seasonal trends but remain below recent-year averages due to macroeconomic uncertainty and project delays. In the United States, the rig count is expected to stabilize following a moderate decline in the first half of the year, supported by targeted investments in high-yield basins and continued operational discipline by U.S. producers.

In this context, Bri-Chem anticipates that Canadian drilling fluids demand will remain relatively soft through the third quarter, with some recovery possible in the fourth quarter as customers begin preparing for 2026 drilling programs. U.S. fluid distribution sales are expected to remain stable, buoyed by sustained activity in key regions such as the Permian Basin and gradual improvement in areas like California and the Rockies.

Bri-Chem remains committed to managing its business with a disciplined focus on working capital efficiency, cost control, and margin preservation. The Company's ability to maintain adequate liquidity during periods of reduced market activity reflects its proactive financial management and strong banking relationships, ensuring operational stability even in uncertain conditions. Management will continue to monitor macroeconomic and industry trends closely, ensuring that Bri-Chem remains agile and responsive to both risks and opportunities.

About Bri-Chem

Bri-Chem has established itself, through a combination of strategic acquisitions and organic growth, as the North American industry leader for wholesale distribution and blending of oilfield drilling, completion, stimulation and production chemical fluids. We sell, blend, package and distribute a full range of drilling fluid products from 23 strategically located warehouses throughout Canada and the United States. Additional information about Bri-Chem is available at www.sedarplus.ca or at Bri-Chem's website at www.brichem.com.

To receive Bri-Chem news updates send your email to ir@brichem.com.

For further information, please contact:

Tony Pagnucco CPA, CA
Bri-Chem Corp.
CFO
T: (780) 571-8587
E: tpagnucco@brichem.com

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information or forward-looking statements (collectively, "forward-looking statements"). These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking statements and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially.

Although the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. By their nature, such forward-looking statements are subject to various risks and uncertainties, which could cause actual results to differ materially from the anticipated results or expectations expressed herein. These risks and uncertainties, include, but are not limited to general economic conditions, prevailing and anticipated industry conditions, access to debt and equity financing on acceptable terms, levels and volatility of commodity prices, maintained demand for drilling fluids, market forces, ability to achieve geographic expansion through new warehouse locations, anticipated impact of new warehouse locations, ability to obtain equipment from suppliers, ability to maintain negotiating power with suppliers and customers, ability to obtain and retain skilled personnel, competition from other industry participants and regulatory conditions. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this press release or otherwise. Except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Non-GAAP Financial Measures

Bri-Chem uses certain measures in this press release which do not have any standardized meaning as prescribed by International Financial Reporting Standards ("IFRS"). These measures, which are derived from information reported in the Company's financial statements, may not be comparable to similar measures presented by other reporting issuers. Investors are cautioned that these measures should not be construed as an alternative to net earnings and operating earnings determined in accordance with IFRS, and these measures should not be considered to be more meaningful than IFRS measures in evaluating the Company's performance. These measures have been described and presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company. These Non-IFRS measures are identified and defined as follows:

Adjusted Net Earnings (Loss), Adjusted Net Earnings (Loss) per share, Adjusted EBITDA, and Adjusted EBITDA per share.

Adjusted Net Earnings (Loss) are defined as net earnings/(loss) before non-recurring events, net of corporate income taxes ("Adjusted Net Earnings"). Adjusted Net Earnings (Loss) per share is defined as Adjusted Net Earnings (Loss) divided by diluted weighted average common shares. Management believes that in addition to net earnings, Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) per share are useful supplemental measures that represent normalized net earnings (loss) from the business so that financial statement users can make insightful comparisons between current periods and historical results.

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, impairment charges, share-based payments, and non-recurring events ("Adjusted EBITDA"). Adjusted EBITDA per share is defined as Adjusted EBITDA divided by diluted weighted average common shares. Management believes that in addition to net earnings, Adjusted EBITDA and Adjusted EBITDA per share are useful supplemental measures of operating performance that normalize financing, depreciation, income tax, and other non-recurring charges which are not controlled at the operating level. The following table provides a reconciliation of Net Earnings under IFRS, as disclosed in the interim financial statements, to Adjusted Net Earnings and Adjusted EBITDA:

		Three months ended						Six months ended
					June 30						June 30
(in 000's)		2025			2024			2025			2024
Net earnings / (loss)	$	157		$	(488	)	$	(255	)	$	(1,994	)
Less:
Deferred tax (recovery)		(97	)		(96	)		(303	)		(357	)
Adjusted net earnings / (loss)		60			(584	)		(558	)		(2,351	)
Add:
Financing costs		656			897			1,382			1,882
Income tax expense		34			68			65			75
Depreciation and amortization		295			325			622			657
Adjusted EBITDA	$	1,045		$	706		$	1,511		$	263

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/262614

FAQ

What were Bri-Chem's (BRYFF) Q2 2025 earnings results?

Bri-Chem reported consolidated sales of $20.5 million (up 7%), Adjusted EBITDA of $1.0 million (up 48%), and adjusted earnings of $0.01 per share compared to a loss of $0.02 in Q2 2024.

How did Bri-Chem's US operations perform in Q2 2025?

Bri-Chem's US drilling fluids distribution division generated $12.3 million in sales, a 7% increase from Q2 2024, despite a 4% decrease in active US operating land rigs.

What is Bri-Chem's working capital position as of Q2 2025?

Working capital was $11.1 million as of June 30, 2025, representing a 21% decrease from $14.1 million in Q2 2024, due to decreased accounts receivables and inventory.

What is Bri-Chem's outlook for the remainder of 2025?

The company expects flat to slightly declining rig activity across North America through 2025, with soft Canadian drilling fluids demand in Q3, and potential recovery beginning in early 2026.

How did Bri-Chem's Canadian operations perform in Q2 2025?

Canadian drilling fluids distribution sales were $1.7 million, higher than the previous year, while the blending and packaging division sales decreased to $3.9 million due to lower cementing and stimulation activities.